GOP Senators From Oil States Revolt Against Trump's Steel Tariff

(Bloomberg) -- Republican Senators Lisa Murkowski and John Cornyn, who represent two of the largest oil-producing states, are not big fans of the Trump administration’s plan to impose tariffs on imported steel and aluminum.

Murkowski said the tariff decision yesterday took her by surprise. The move “sends a confusing message to our friends and allies” who are just starting to buy U.S. energy exports, the Alaska senator told attendees of the CERAWeek by IHS Markit conference in Houston on Friday.

The levies may add as much as $500 million to the estimated $45 billion to $65 billion cost of building a proposed 800-mile (1,290-kilometer) natural gas pipeline in her home state, Murkowski said as she shared a stage with Cornyn of Texas.

“I think he may have done it the way he did because he didn’t want people to try to talk him out of it,” Cornyn, the second-most powerful Republican in the Senate, said of Trump’s decision. “I feel like he made a campaign promise, he needed to follow through on that promise.”

The two senators were preaching to the choir. There’s been little support voiced for the tariffs at the massive week-long energy conference in the oil capital of the Western Hemisphere. Oil executives, who depend on steel for every facet of production, refining and transportation, are worried not only that the levies will raise costs but that they’ll spur retaliatory measures that would harm the burgeoning export market for U.S. oil and gas.

The American Petroleum Institute, the industry’s main lobbying arm, said yesterday the tariffs are “inconsistent” with the administration’s support for added energy production.

Texas is the largest oil-producing state and Alaska ranks fourth, according to the U.S. Energy Information Administration.

Cornyn said the tariffs “will have to go through the usual litigation process, either the WTO or the courts to see how this works.” He pointed out that steel tariffs imposed during the George W. Bush administration “were ultimately reversed” by the World Trade Organization.

Murkowski said Congress is “just now having the conversation about whether or not legislation is, in fact, needed” on tariffs, pointing to statements Thursday by Arizona Senator Jeff Flake. Asked about the prospect for lawsuits on the tariffs, Murkowski told reporters: “If I was going to give you a flip response, I’d say we expect litigation on everything.”

To contact the reporter on this story: Tina Davis in New York at tinadavis@bloomberg.net. To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Joe Carroll, Carlos Caminada.

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